Gold: Bargain before buying jewellery, says Kolkata bullion merchants association

Have you bargained with the jeweller on the price of gold like you might have haggled with the green grocer? Chances are very little that you have. But bullion merchants association office bearers in Kolkata are suggesting that you can.

Explaining the mechanism how the price of gold is set every day at most jewellers, an office bearer of West Bengal Bullion Merchants and Jewellers Association (WBBMJA) said that they announce a price every day, but it is not mandatory that outlet owners abide by it.

They often set their own price and a degree of arbitrariness creeps in the price of gold in the jewellery.

Every day around 4 pm WBBMJA releases price of gold for that day to the media.

“Buyers should check the price of gold in the newspapers, which would give them a benchmark. If the price of gold, which is usually measured in units of 10 grams, varies with this price by more than Rs 100, the customer has every right to bargain,” said a WBBMJA office bearer on conditions of anonymity.

According to him, if the price is more than the association-quoted price by Rs 50-100 per 10 grams, it is acceptable, but not beyond that.

“Following the price set by WBBMJA is not mandatory for our members. They can decide their own price every day,” WBBMJA assistant secretary S K Chandra earlier told Money9.

WBBMJA does not have a website.

Jewellery making is usually an unorganised sector activity in this country with hundreds of small jewellery makers dotting every big city.

There are no price regulators though about 70% of the country’s demand is met through imports and only government licensed agencies – most of them banks – can import gold.

India is the world’s largest importer of gold.

Gold import rose to a record 160 tonnes in March riding on the back of a dip in import duties and a softening of prices from the record high seen in August-September last year.

The macro factors that determine the prices of gold are demand and supply, inflation, import duty, GST, rupee-dollar exchange rate, rise of prices in the global market, uncertainty in the political/social climate etc. GST and other local taxes are levied by the state government which varies from state to state.

At a micro level, bullion associations mostly decide day-to-day gold prices in the different states or cities that is supposed to reflect in the price of gold displayed at jewellery outlets. But there is a lack of clarity in the whole process and customers are often its victim.